Market Overview - Investors are currently facing multiple concerns including geopolitical tensions, credit issues, a software meltdown, and uncertain inflation trends [1] - Despite these challenges, there is an expectation of robust global economic growth, as indicated by portfolio companies and earnings [3] Corporate Focus - CEOs are primarily concerned with security, resiliency, and ensuring operational continuity amidst geopolitical events, particularly in the Middle East [4] - Companies are investing in building redundancy and creating independent supply chains to mitigate risks [5] Economic Trends - There is a shift towards higher government spending, larger deficits, and a more complex geopolitical landscape, which may lead to stickier inflation [6] - The nominal growth environment is expected to support investments in real assets such as infrastructure and real estate, which are likely to perform well in a rising nominal GDP scenario [7] Regional Insights - India's economy is experiencing significant nominal growth of 10-11%, creating opportunities for infrastructure investments as the government seeks to offload assets from its balance sheet [8][9] Credit Market Dynamics - The private credit market, valued at $1.7 trillion, represents only 1% of the total global fixed income market, indicating potential for performance dispersion among firms [12][13] - A low default rate of 1% is noted, but there are concerns that defaults may increase, impacting recovery rates [15][17] Investment Strategy - Emphasis is placed on identifying contracted cash flows, particularly in sectors like data centers and AI, to navigate the current market landscape [11] - Diversification in fixed income and careful selection of equity risk are recommended to optimize returns in the current environment [18]

Financial Data and Key Metrics Changes - The net investment income per share for Q4 2025 was $0.37, with a net asset value (NAV) per share of $12.64, reflecting a decrease of approximately 1% from the previous quarter due to net realized and unrealized losses [20][21] - The adjusted NAV per share for Q4 2025 is $12.61 after accounting for a supplemental dividend of $0.03 per share [20] - The net debt-to-equity ratio increased to 1.27x as of December 31, 2025, compared to 1.17x as of September 30, 2025 [21][29] Business Line Data and Key Metrics Changes - The portfolio's median EBITDA increased by 84% from year-end 2021 to $71.8 million at year-end 2025 [6] - The percentage of first lien investments in the portfolio rose to 97% from 89% during the same period [6] - PIK (Payment-in-Kind) as a percentage of total investment income decreased to 9% in Q4 2025 from 15.3% in Q4 2024 [7] - Investments on non-accrual status decreased slightly to 1.9% of fair value from 2% during the year [7] Market Data and Key Metrics Changes - In the Americas, the company committed approximately $14.6 billion in total for the year, up from $13 billion in 2024 and more than double the activity in 2023 [9] - Total M&A volume globally increased by 44% from 2024, with U.S. private equity deals reaching nearly $1.2 trillion [9] Company Strategy and Development Direction - The company has enhanced its sourcing, underwriting, and portfolio management since its integration into the broader Direct Lending platform in 2022, with 57% of the portfolio benefiting from this integration [4] - The focus remains on high-quality, EBITDA-based investments while actively managing legacy portfolio risks, particularly concerning annualized recurring revenue (ARR) loans [8] - The company aims to leverage its position as part of the number one global investment bank to identify attractive investment opportunities [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the M&A momentum continuing in a potentially falling rate environment, which is expected to stimulate greater demand for credit financing [9] - The company remains vigilant regarding AI's impact on software business models and is prepared to adapt its investment strategies accordingly [12][19] Other Important Information - The company repurchased over 1.5 million shares for $15 million, which is expected to be accretive to NAV by $0.04 per share [27] - The total portfolio investments at fair value were $3.3 billion, with outstanding debt of $1.9 billion and net assets of $1.4 billion as of the end of Q4 2025 [29] Q&A Session Summary Question: Insights on Clearwater and market competitiveness - Management highlighted the advantage of being connected to the number one M&A investment bank, which allows for unique opportunities in take-private transactions [37][39] Question: Strategy regarding spillover and deployment - Management indicated that while there are no current plans for special distributions, they could issue some if necessary, depending on future earnings [52] Question: Changes in deal flow composition - Management noted that the composition of deal flow remains stable, with signs of increased M&A activity in various industries, although software remains cautious due to market volatility [53] Question: AI risk framework application to current portfolio - Management confirmed that while most of the portfolio aligns well with the new AI framework, some legacy assets are being actively managed and exited if they do not meet the criteria [58]

Financial Data and Key Metrics Changes - In Q4 2025, total investment income was $42.2 million, an increase of $4.9 million from Q3 2025, driven by higher interest income and fee income [16][17] - Adjusted net investment income (NII) grew 5.1% to $19.4 million, with adjusted NII per share at $0.52, compared to $0.50 in Q3 2025 [7][18] - Net asset value increased by 13.2% to $741.9 million at quarter end, with a per-share value of $19.55 [9] Business Line Data and Key Metrics Changes - Originations in Q4 2025 reached $213.7 million, the highest quarterly amount, with total investments for 2025 at $498.2 million [4][5] - The debt portfolio performed well, with first lien investments comprising 86% of the total debt portfolio [11] - The software and tech-enabled services portfolio was valued at $464 million, with 92% in first lien debt [12][13] Market Data and Key Metrics Changes - The company noted a strong M&A environment contributing to increased deal flow, with expectations for continued activity in 2026 [4][15] - The weighted average interest rate on outstanding debt was 5.2% as of December 31, 2025 [19] Company Strategy and Development Direction - The company aims to generate attractive, risk-adjusted returns for shareholders while growing net asset value over time [15] - Focus remains on investing in niche market leaders with proven business models that generate recurring revenue [7][15] Management's Comments on Operating Environment and Future Outlook - Management indicated that Q1 2026 deal flow is expected to be more modest compared to Q4 2025, influenced by seasonal patterns [27][28] - The company remains optimistic about the long-term health of its portfolio, with non-accruals accounting for less than 1% of the total portfolio [13] Other Important Information - The company declared a total dividend of $0.52 per share for Q1 2026, consisting of a base dividend and a supplemental dividend [8] - Total liquidity as of December 31, 2025, was approximately $304.8 million, including cash and available credit [21] Q&A Session Summary Question: Is there any spillover of deals from Q4 into Q1? - Management indicated that while Q4 was strong, Q1 is expected to have more modest deal flow due to seasonal patterns [27][28] Question: Can you elaborate on the software companies in your portfolio? - Management emphasized the importance of long-term barriers to entry and the quality of management in evaluating software investments [32][34] Question: What is the focus on ARR loans in your portfolio? - Approximately 22% of the software portfolio consists of ARR loans, with a focus on growth through covenants [40] Question: How comfortable is the company with its largest investment in Fansteel? - Management expressed strong confidence in the long-term outlook for Fansteel, viewing it as a leader in its space [42] Question: What are the average floors in your floating rate debt portfolio? - Most floating rate debt originated in recent years has floors in the 2% range [44]

Financial Data and Key Metrics Changes - The net investment income per share for Q4 2025 was $0.37, with a net asset value (NAV) per share of $12.64, reflecting a decrease of approximately 1% from the previous quarter due to net realized and unrealized losses [20] - The adjusted NAV per share for Q4 2025 is $12.61 after accounting for a supplemental dividend of $0.03 per share [20] - The net debt-to-equity ratio increased to 1.27x as of December 31, 2025, compared to 1.17x as of September 30, 2025 [21] Business Line Data and Key Metrics Changes - The portfolio's median EBITDA increased by 84% from year-end 2021 to $71.8 million at year-end 2025 [6] - The proportion of first lien investments in the portfolio rose to 97% from 89% during the same period [6] - The weighted average yield of total debt and income-producing investments at amortized cost decreased to 9.9% at the end of Q4 2025 from 10.3% at the end of Q3 2025 [24] Market Data and Key Metrics Changes - In the Americas, the company committed approximately $14.6 billion in total throughout 2025, up from $13 billion in 2024 and more than double the activity in 2023 [9] - Total M&A volume globally increased by 44% from 2024, with U.S. private equity deals reaching nearly $1.2 trillion [9] - The exposure to annualized recurring revenue (ARR) loans within the broader BDC complex decreased significantly to approximately 5% at year-end 2025 from a peak of 36.5% in Q3 2022 [8] Company Strategy and Development Direction - The company has enhanced its sourcing, underwriting, and portfolio management since its integration into the Direct Lending platform in 2022, with 57% of the portfolio benefiting from this integration [4] - The focus remains on high-quality investments, particularly in the software sector, leveraging the Goldman Sachs ecosystem for proprietary origination and enhanced diligence [17][19] - The company is proactively assessing the impacts of AI on the software space and has implemented a framework to evaluate AI disruption risk [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the M&A momentum continuing in a potentially falling rate environment, which is expected to stimulate greater demand for credit financing [9] - The company remains vigilant regarding credit quality and is prepared to adapt its strategies in response to any material changes in portfolio company performance [12][19] - Management emphasized the importance of maintaining a disciplined approach amidst market volatility and AI-related risks [19] Other Important Information - The company repurchased over 1.5 million shares for $15 million during the quarter, which is expected to be accretive to NAV by $0.04 per share [27] - The total investments in the portfolio were $3.26 billion at fair value, with 38.4% in senior secured loans [22] - The company has a remaining borrowing capacity of approximately $1.1 billion under its revolving credit facility as of December 31, 2025 [29] Q&A Session Summary Question: Can you provide insights on the Clearwater deal and its competitive positioning? - Management highlighted the advantage of being connected to the number one M&A investment bank, which allows for unique opportunities in take-private transactions, emphasizing the importance of confidentiality in such deals [37][39] Question: How does the company approach the structure of its semi-liquid investments? - Management clarified that there are no different standards for different vehicles, and all deals go through a single robust investment committee process [41][42] Question: What is the strategy regarding the spillover and its deployment heading into 2026? - Management indicated that while there are no current plans for a special distribution, they could issue some incremental net investment income if needed [52] Question: Are there any shifts in the mix of deals in the pipeline? - Management noted that the composition of deal flow remains stable, with signs of increased M&A activity in various industries, although software remains cautious due to market conditions [53] Question: How does the company view its share repurchase program? - Management stated that the ability to utilize the repurchase program will depend on market opportunities and the net debt-to-equity ratio, which is currently around the target [60][61]

Financial Data and Key Metrics Changes - In Q4 2025, total investment income was $42.2 million, an increase of $4.9 million from Q3 2025, driven by higher interest income and fee income [15][16] - Adjusted net investment income (NII) grew 5.1% to $19.4 million, with adjusted NII per share at $0.52, compared to $0.50 in Q3 2025 [6][18] - Net asset value increased by 13.2% to $741.9 million at quarter end, with a per-share value of $19.55 [9] Business Line Data and Key Metrics Changes - Originations in Q4 2025 reached $213.7 million, the highest quarterly amount, contributing to total investments of $498.2 million for the year [4][5] - The debt portfolio performed well, with first lien investments comprising 86% of the total debt portfolio [11] - The software and tech-enabled services portfolio was valued at $464 million, with 92% in first lien debt [12][13] Market Data and Key Metrics Changes - The company noted a strong M&A environment in Q4 2025, which contributed to increased deal flow and investment activity [4][5] - The weighted average interest rate on outstanding debt was 5.2% as of December 31, 2025 [19] Company Strategy and Development Direction - The company aims to generate attractive, risk-adjusted returns for shareholders while growing net asset value over time [14] - Fidus continues to focus on niche market leaders in the lower middle market, applying strict underwriting standards [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about deal flow in 2026, expecting an increase in activity levels as private equity owners may need to bring portfolio companies to market [14][28] - The company is confident in the health of its portfolio, with non-accruals accounting for less than 1% of the total portfolio on a fair value basis [13] Other Important Information - The company declared a total dividend of $0.52 per share for Q1 2026, consisting of a base dividend of $0.43 and a supplemental dividend of $0.09 [8] - Total liquidity as of December 31, 2025, was approximately $304.8 million, including cash and available credit [21] Q&A Session Summary Question: Is there any spillover of deals from Q4 into Q1? - Management indicated that Q1 2026 deal flow is expected to be more modest compared to Q4, influenced by seasonal patterns, but they anticipate an increase in activity throughout the year [24][28] Question: Can you elaborate on the types of software businesses in the portfolio? - Management highlighted the focus on companies with long-term barriers to entry, such as data moats and deep industry expertise, and noted that nearly all portfolio companies are adding AI features [30][32] Question: What is the focus on ARR loans in the portfolio? - Approximately 22% of the software portfolio consists of ARR loans, with covenants in place to ensure growth and transition to cash flow [39] Question: How comfortable is the company with its largest investment in Fan Steel? - Management expressed strong confidence in the long-term outlook for Fan Steel, viewing it as a leader in its space with a growing product portfolio [40][41] Question: What are the average floors in the floating rate debt portfolio? - Most recent floors on floating rate debt are in the 2% range, and management expects some decline in total yields if SOFR decreases [43][46] Question: What are the recovery rates for first lien loans in the lower middle market? - Management indicated that recovery rates for first lien loans typically range from 60% to 85%, and they do not foresee drastic changes in values of businesses in their portfolio [64][66]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2025 was $0.32 per share, covering the $0.32 per share dividend paid on December 31 [4][5] - Net asset value (NAV) declined to $11.52 per share from $12.06 per share, primarily due to lower valuation on Edmentum [5][25] - Total investment income for the quarter was $77 million, a 4% decrease compared to the prior quarter [34] Business Line Data and Key Metrics Changes - Approximately 95% of the loan portfolio is ranked green, with no positions ranked red [8][24] - PIK income is expected to decrease by 20%-25% as cash proceeds from the asset sale are redeployed [20] - The top five positions now represent 14% of NMFC's portfolio value, down from previous concentrations [19] Market Data and Key Metrics Changes - The company sold approximately $477 million of assets at a price of 94% of the December 31 marks, which is considered essentially par [12][13] - The secondary sale is expected to improve diversification, with senior-oriented assets now representing 81% of the portfolio, up from 75% [19][32] Company Strategy and Development Direction - The company plans to utilize the full Dividend Protection Program, reducing the performance fee from 20% to 15% until the end of 2026, and intends to maintain this lower fee permanently thereafter [12] - The focus remains on deploying proceeds from the asset sale into better credit investment opportunities and stock buybacks [42][60] - The company aims to improve earnings and book value through strategic investments and potential equity appreciation in companies like UniTek [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges increased risks across various sectors due to AI but sees opportunities for informed lenders [22] - The company expects to operate within a leverage target of 1 to 1.25, maintaining financial flexibility post-asset sale [41] - Management believes NMFC shares should trade back towards book value, supported by a sustainable dividend rate of approximately $0.25 per share per quarter starting Q2 2026 [15] Other Important Information - The company repurchased approximately $52 million of shares in 2025 and has board authorization to buy an additional $80 million [16] - Non-accruals remain low at 1.4% of the portfolio at fair value, with expectations for DCA to return to accrual status in Q2 [26] Q&A Session Summary Question: Is the 94% discount inclusive of any advisory fee? - The 94% of par was the purchase price of the assets, with expected fees and expenses of about $7 million [41] Question: Did you try to sell any struggling assets? - The mindset was to reduce concentration and PIK income, focusing on over-concentrated names with high PIK characteristics [44][52] Question: Was the asset sale process competitive? - The sale was competitive, led by Evercore, with multiple bids received, and the selected assets were those that aligned with the company's strategic goals [50][51]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2025 was $0.32 per share, covering the $0.32 per share dividend paid on December 31, 2025 [4] - Net asset value (NAV) declined to $11.52 per share from $12.06 per share, primarily due to lower valuation on Edmentum [5][25] - Total investment income for the quarter was $77 million, a 4% decrease compared to the prior quarter [35] - Total net expenses decreased by 5% to $44 million, including a fee waiver [35] Business Line Data and Key Metrics Changes - Approximately 95% of the loan portfolio is ranked green, with no positions rated red [8][24] - The company sold $477 million of assets, diversifying the portfolio and reducing PIK income [12][18] - Senior-oriented assets now represent 81% of the portfolio, up from 75% in the prior year [19][32] Market Data and Key Metrics Changes - The company expects to see some spread widening and increased pricing dispersion in direct lending [28] - Approximately 41% of pro forma PIK income will be generated by high-performing companies like Benevis and UniTek [20] Company Strategy and Development Direction - The company plans to utilize the full Dividend Protection Program, reducing the incentive fee from 20% to 15% until the end of 2026 [12] - Following the asset sale, the company aims to redeploy proceeds primarily into first lien assets [19][32] - The company is focused on business building and leveraging its expertise in software loans, particularly in the context of AI [10][22] Management's Comments on Operating Environment and Future Outlook - Management believes NMFC shares should trade back towards book value, citing several positive factors [11] - The company acknowledges increased risks related to AI but sees opportunities for well-informed lenders [22] - Management remains optimistic about the potential for equity appreciation in companies like UniTek [16] Other Important Information - The company repurchased approximately $52 million of shares in 2025 and has authorization to buy an additional $80 million [16] - Nonaccruals remain low at 1.4% of the portfolio at fair value [26] Q&A Session Summary Question: Is the 94% discount on the asset sale inclusive of any advisory fees? - The 94% of par was the purchase price, with expected fees and expenses of about $7 million [41] Question: Did the company try to sell any struggling assets? - The company focused on reducing concentration and PIK income, selling larger positions that were scrutinized by the market [44][45] Question: How were the assets selected for the sale? - The assets were chosen based on concentration and PIK characteristics, aiming to improve portfolio composition [51][52] Question: How does the pricing of the assets compare to internal marks? - The sale was seen as fair for both sides, validating internal marks while reducing concentration [61]

Earnings Presentation Q4 2025 February 25, 2026 14 Important Notices and Safe Harbor Statement Throughout the document, Senior Advisors are included in all references to staff members, team members, investment professionals or operating partners/executives unless stated otherwise. Generally, New Mountain Senior Advisors are similar to "Operating Partners" who provide general or specific industry expertise on particular projects or transactions. All persons listed in the Senior Advisors (Full Access) categor ...

Core Viewpoint - P10, Inc. has announced a definitive agreement to acquire Stellus Capital Management for an initial purchase price of $250 million, which will add approximately $3.8 billion in assets under management to P10's portfolio [1][2][4]. Company Overview - P10, Inc. is a leading private markets solutions provider with over $40 billion in assets under management as of September 30, 2025, focusing on private equity, private credit, and venture capital in the middle and lower-middle market [8]. - Stellus Capital Management specializes in senior secured loans in the lower-middle market and has a track record of investing over $10.3 billion across more than 375 companies [2][9]. Transaction Details - The acquisition involves 100% of Stellus's equity interests and fee-related earnings, excluding existing private fund carried interest or performance fees [4]. - The initial consideration of $250 million consists of $125 million in cash and $125 million in units of P10 Intermediate Holdings, LLC, which can be exchanged for P10 common stock [5]. - An additional earnout consideration of up to $60 million may be payable based on fee-related revenue in 2027 and 2029 [5]. Strategic Fit - The acquisition aligns with P10's long-term strategy to partner with specialized investment managers in the middle and lower-middle market, enhancing its direct lending capabilities [3]. - Stellus's existing management team will continue to operate the firm, maintaining its investment decision-making processes [1][3]. Future Outlook - The transaction is expected to close in mid-2026, subject to shareholder approvals and customary closing conditions, and is anticipated to be modestly accretive to P10's ANI per share and FRE margin in the first full year post-close [6].

Core Insights - Ares Management Corporation reported record U.S. direct lending commitments of approximately $19.4 billion in the fourth quarter of 2025 and $55.0 billion for the entire year ending December 31, 2025 [1] Group 1: Financial Performance - In the fourth quarter of 2025, Ares closed approximately $19.4 billion across 119 transactions [1] - For the 12 months ended December 31, 2025, Ares closed approximately $55.0 billion across 358 transactions [1]